SAN JOSE, CA-The semiconductor industry is at the beginning of a new 20 year growth cycle that will largely be driven by consumer electronics demand, according to the keynote speaker at the SEMI Strategic Business Conference 2006, held in late April in Napa, CA. Eli Harari, president and CEO of flash chip maker SanDisk, said consumer electronics will create the same kind of growth engine in the next 20 years that PCs did from 1980 to 2000.
“When you have dramatic cost reductions, and the key driving force is Moore’s Law…you enable completely new markets,” he said. “That’s why you have a tripling of the market demand [for NAND flash].” He noted that three of the top five markets for NAND flash did not exist five years ago.
SanDisk has budgeted $1.4 billion in capital expenditure this year, even though it’s been characterized in the past as a fabless semiconductor company. The tremendous growth in flash that is projected to occur over the next five years will generate the need for multiple new 300mm fabs, according to Harari.
“Huge capex additions are needed to meet the insatiable NAND market demand,” he said. “If the demand is going to continue at this rate definitely there is not enough capacity in place today.”
In 2006, NAND flash will account for an estimated $13.2 billion of the total flash market of $21.5 billion, according to IM Flash Technologies, a joint venture between Intel and Micron Technology. The market is being driven by applications such as MP3 players, USB drives, PDAs, digital cameras and mobile phones. NAND is also now competing with hard disk drives in MP3 players and PDAs. In the future, NAND flash will begin to replace disk drives in hand held games and laptop computers, according to Rod Morgan, executive officer, IM Flash Technologies.
SanDisk’s Harari pointed out that NAND flash has replaced microprocessors and DRAMs as the industry’s technology driver. “There is no doubt about it, NAND flash will be the driver for immersion lithography,” he said.
Echoing Harari’s earlier observations, Pushkar Apte, vice president of technology programs for the Semiconductor Industry Association, noted that semiconductor end-use has spread to a vast number of individual consumers and is no longer the exclusive realm of “geeks and techies.” Apte presented data that showed in 1965 the U.S. government purchased 80% of all semiconductors. During the 1980s and 1990s corporate users became the most significant purchasers in the market. An inflection point was reached in 2005 when individual consumers overtook the corporate sector as the single largest user of semiconductor-enabled products.